It is Valentine's Day and Fred is desperately searching all over town for a dozen roses to give to Diane. "I'll pay anything for a dozen roses," he says. Whether he really means it or not, the statement implies that his price elasticity of demand for roses is
A) infinite
B) negative
C) one
D) greater than one
E) zero

Question

Quizplus · Accepted Answer

Fred's statement implies that he is perfectly inelastic in his demand for roses, meaning he is willing to pay any price for them, which corresponds to a price elasticity of demand of zero.

It Is Valentine's Day and Fred Is Desperately Searching All